Essar Steel cancels all pre-insolvency shareholder accounts
03 January 2020
Essar Steel has announced the cancellation of shares held by investors from their demat accounts, while those held in physical form as share certificates will also not be valid following the debt resolution plan that extinguished the company’s capital and merged it with ArcelorMittal.
Essar Steel’s company secretary Pankaj S Chourasia informed investors of the capital write down in an e-mailed statement to investors in connection with the corporate insolvency resolution process of Essar Steel India.
The Supreme Court, through its judgment of 15 November, said the resolution plan submitted by ArcelorMittal India has been approved after considering the judgment of the National Company Law Tribunal (NCLT) Ahmedabad and the National Company Law Appellate Tribunal (NCLAT).
The Resolution Plan provides for the reduction of the entire existing capital - issued, subscribed and paid-up share capital (both equity and preference) - of the company held by the existing promoters and public shareholders, in such a manner so as to result in ArcelorMittal India (along with its nominee shareholders) becoming the sole shareholders of the company.
Consequently the entire existing issued, subscribed and paid-up share capital of the company stood cancelled and extinguished with effect from 16 December 2019, the Company Secretary said.
"Pursuant to such capital reduction and cancellation, the shares of the company held by investors have been debited from demat account," he said.
"Share certificates held in physical form will also be not valid henceforth," he added.